UBB widow: Massey defrauded families

CHARLESTON, W.Va. -- Massey Energy officials tricked the families of some Upper Big Branch miners into early wrongful-death settlements that have proven inadequate, given evidence of safety violations and criminal conduct linked to the fatal April 2010 explosion, according to a lawsuit quietly filed last month.

Edith May Willingham alleges that Massey officials, including then-CEO Don Blankenship, "fraudulently induced" her to settle claims regarding the death of her husband, Benny, who was one of 29 miners killed in the disaster.

The lawsuit names as defendants Massey and Alpha Natural Resources, which bought Massey in June 2011, along with Blankenship, Alpha CEO Kevin Crutchfield and nine other Massey officers and board members.

"It is the plaintiff's belief that the defendants possess information regarding this tragic event that they intentionally withheld from her, while those individuals who were representatives of the company were much better schooled and educated and in a better position to entice Mrs. Willingham into an early settlement," the lawsuit states.

The lawsuit says other families were in similar positions, and seeks class-action status to represent any families that accepted "an initial settlement offer." It alleges Massey also defrauded the circuit court in Boone County by withholding information that affected the value of the wrongful-death claims.

"The defendants, in addition to being in a superior bargaining position, intentionally withheld information from the settling parties and the court that would have been pertinent to their decision-making process," the lawsuit alleges.

In the weeks immediately following the disaster, Massey officials visited the homes of the disaster's victims and offered each of the families $3 million settlements, on top of death benefits that included health insurance and college tuition.

The deals were aimed at heading off the formal filing of wrongful-death lawsuits against the company, avoiding lengthy litigation and putting a firm number on the company's potential liabilities.

At least four families quickly accepted the settlements, and an undetermined number later made deals with Massey without formally suing the coal giant. Other families settled later, many of them after a mediation session between company and family lawyers in early January at Glade Springs Resort near Daniels.

Federal, state and independent investigators have blamed the disaster on a long list of Massey safety violations that allowed a small spark on improperly maintained mining equipment to cause a methane ignition that quickly grew into a huge coal-dust explosion.

In December, Alpha reached a more than $200 million settlement with U.S. Attorney Booth Goodwin, avoiding criminal prosecution, but agreeing to pay MSHA fines and institute various safety reforms. A sprawling criminal investigation that already has secured one conviction and two guilty pleas of mine employees continues, with prosecutors indicating they are trying to move up Massey's corporate ladder.

In the immediate aftermath of the disaster, when word about the company's discussions with families began to leak out, Massey issued a statement that defended its actions, but also warned families about potential legal fees eating into any settlements.

"If any proposals are made to the families, those families will be given a full opportunity to review those proposals, with a lawyer of their choosing," said the April 15, 2010, statement. "To the extent settlements are reached, it is the company's desire that the families --- and not personal injury lawyers -- receive the money.

"Unfortunately, personal injury lawyers frequently take 30 to 40 percent of any settlement received by a family," the statement said. "The company hopes such a result can be avoided in this circumstance."

Word of the new lawsuit was revealed Thursday in a financial disclosure that Alpha Natural Resources filed with the U.S. Securities and Exchange Commission.

Alpha said it had reached settlements with all 29 families of miners who died, but that two families had "recently withdrawn their prior agreements to settle" and that negotiations were ongoing in those cases.

The company also reported that one of the families had filed a class action "purportedly on behalf of the families that settled their claims prior to the mediation, alleging fraudulent inducements into a contract," apparently referring to the lawsuit filed on April 5, 2012, on behalf of the Willingham family by Beckley lawyer Randolph McGraw.

Alpha spokesman Ted Pile did not respond Friday to a request for comment beyond what the company said in its SEC filing.

In the lawsuit, McGraw recounted a wide variety of evidence he says indicts "Massey Energy Company's lawless operations, which have placed production ahead of safety [and] have claimed the lives of far too many West Virginia miners."

Among other things, the lawsuit cites U.S. Mine Safety and Health Administration citations and federal criminal charges brought after the deaths of two miners in the January 2006 fire at Massey's Aracoma Alma No. 1 Mine in Logan County, Massey's long list of other mining deaths and safety violations, and specific instances where Massey managers at Upper Big Branch told miners to ignore safety problems and keep coal production moving.

"Some of the information which the defendants withheld was the fact that they and/or their companies had engaged in specific criminal conduct, and committed criminal activity," the lawsuit alleges. "While the company and/or individuals named in this complaint possessed this specific information and knowledge, they did not relay on to plaintiffs any of the specific facts that would have sufficiently informed the plaintiffs of the circumstances that existed at the time of this explosion, and later deaths of their loved ones.

"Based upon this information and belief, the plaintiffs believe that a fraud was committed upon them, thus inducing them into an early settlement agreement that has proven to be insufficient to cover their loss and damages in this matter," the lawsuit says.